First, the whole process of administering highway construction and maintenance at both
the state and county levels must be re-examined. MDOT has made major progress in
controlling its costs in recent years and has plans to further reduce those costs. It has,
for instance, cut its number of full-time employees from 4,950 in 1984 to 3,850 in 1994,
and has plans to reduce the workforce to 3,525 by 1998.40 MDOT program size per
FTE (Full-Time Equivalents) has also been increasing. In 1984 MDOT produced $140,000 of
program per FTE. That has increased to $250,000 in 1994, and MDOT plans to improve that
ratio to $510,000 by 1998. MDOT's administration costs as a percent of total budget have
also fallen from 10.3% in 1984 to 9.6% in 1994, with plans to decrease this level to 7.2%
by 1998. However, a somewhat controversial article by a University of North
Carolina-Charlotte professor in the October 1994 issue of Governing claims that
Michigan ranks fourth highest in the country on a measure of state administrative costs.41
While substantial progress has been made, additional efforts must be made to increase MDOT
productivity and control costs related to administration and fees collection.

Because additional improvements in MDOT administrative costs are already factored into
MDOT's needs assessment, no savings are assumed available for offset against the
administrative costs. However, it is possible to obtain savings in collection costs. MDOT
provides large sums of money to both the Secretary of State and Treasury Departments, and
there is little control over costs incurred by these agencies.

For instance, MDOT makes some $80 million per year available to the Secretary of State
for administration, and $6 million per year to Treasury for collection of fuel taxes,
including taxes on trucking companies. However, the Secretary of State, Public Service
Commission, and Department of Transportation also collect various fees from trucking
companies. Both Treasury and the Secretary of State audit companies and there are numerous
other duplications. An effort to institute "one stop shopping" and
administration of truck fee collections would save both the state and the trucking
industry money. Michigan government, at the urging of the National Association of
Governors, has been working on such a program since 1985 but has made little progress
while other states such as Iowa and Virginia have completed their programs. With this
program and a few other savings MDOT can save at least $3.0 million per year.

Increased legislative oversight and public visibility of MDOT operations might help
management to control planning and administrative costs related to excessive regulations
and obsolete mandated procedures. Such visibility would help build the case to undo such
regulations. For instance, both federal and state environmental and long-term planning
regulations are driving up MDOT administrative costs. Increased legislative oversight
would help build the case for more careful cost-benefit analysis of environmental and
other regulations that drive up the cost of highway construction with little offsetting
benefit. Such oversight might also better familiarize legislators with federal highway
planning and roadbuilding regulations that drive up costs with little benefit, and
increase pressure on the Congress to eliminate these requirements. Currently, because all
funding is from restricted funds, there is almost no legislative oversight and public
visibility of MDOT administrative costs.